Dec 4 2010

Piedmont Board of Education to Review the Budget Picture

Update: A summary of Board discussion on this item at the December 8th meeting prepared by Board Member June Monarch may be found here.

The Piedmont Unified School District has posted its First Interim Report for 2010-11.  It confirms that its budget shortfall will be $4 million over the next 2 years, rather than the $5 million initially projected.

There are no reserve monies available to resolve the $4 million shortage.  Reserves will stand at $3 million at the end of 2010-11.  Reserves of approximately $2 million (3%) are required by the State.  Expenditure of excess reserves above the $2 million required minimum will occur in 2011-12 and this has already been built into the budget figures.  (At p. 4.)

The report states:

“Although the District will be able to meet its financial obligations for the current year and 2011-12 (with a diminished reserve balance for economic uncertainty), the 2012-13 year reveals a negative ending fund balance of nearly $4.0 Million.  This figure is $1 million less than what was reported during the Revised Budget presentation in September, 2010, primarily due to the passage of a new State budget that restores over $600k in Revenue Limit funding and one-time federal stimulus funding of $479k.” (At p. 2.)

In order to balance the budget through 2012-13, $1.4 million of ongoing, rather than one-time, reductions are required, beginning in 2011-12.  (At. p. 7.)  These savings will compound ($1.4 the first year, $2.8 the second year) for a total savings of $4 million over 2 years, remedying the shortage.

The multi-year budget presented by the School Superintendent assumes continuing step and column increases, as well as continuing increases in health & welfare benefits and overall benefits paid by the district.   (These benefits are increasing in cost each year by 13.5% and 10% per year, respectively.)  These salary and benefit increases over the next 2 years represent approximately half, or $2 million, of the total $4 million shortfall.  (At p. 4-5.)  Union contracts controlling these increases are currently being negotiated.

The report indicates options available to resolve its shortfall, “include revenue enhancement (parcel tax), reductions in program (layoffs), and savings through negotiations with employee associations.”  (At p. 2.)   

LINK: See prior article detailing specific budget savings options and amounts.

The Citizens’ Advisory Committee and the Budget Advisory Committee: The report notes the important roles of the Citizens’ Advisory Committee and the Budget Advisory Committee in ongoing budgetary decisions.

“The Budget Advisory Committee (BAC), which is a standing committee with representatives from all stakeholders in the District, is a vehicle for dissemination of information to as many parents, students, staff and community members as possible. Its purpose is to review the District’s budget, share the information with constituent groups and generate recommendations for Board consideration in the budget development process.  It provides frequent opportunities for the Piedmont educational community to review the District’s budget and identify trends and make recommendations for Board consideration in the budget development process.  The Committee is advisory in nature and does not have decision-making responsibilities.

“Additionally, a Citizens Advisory Committee on Parcel Tax Program Measures B and E (June 2, 0009 Election) was established to serve in an advisory capacity to the Board to help review and project the financial needs of the District with respect to whether and in what amount to levy voter-approved parcel taxes.” 

LINK: Possible limits on the Citizens’ Advisory Committee ability to research and make recommendations to the District on program. LINK: Comparing the BAC and the CAC.

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